Dockets Management Branch
HFA-305
12420 Parklawn Drive
Room 1-23
Rockville, MD 20857
Dear Dockets Management Clerk:
On September 30, 1997, the Food and Drug Administration (FDA) published a final rule concerning user labeling for rubber-containing medical devices. The goal of the rule is to alert users who may be allergic to natural rubber latex to the fact that products contain possible allergens. To accomplish this goal, the FDA final rule requires labels on natural rubber latex products that contact humans to state: "This Product Contains Natural Latex Which May Cause Allergic Reactions"; and the rule requires labels on dry natural rubber that contacts humans to state: "This Product Contains Dry Natural Rubber".
The Office of the Chief Counsel for Advocacy of the U.S. Small Business Administration was created in 1976 to represent the views and interests of small business in Federal policy making activities.(1) The Chief Counsel participates in rulemakings when he deems it necessary to ensure proper representation of small business interests. In addition to these responsibilities, the Chief Counsel monitors compliance with the Regulatory Flexibility Act (RFA),(2) and works with federal agencies to ensure that their rulemakings demonstrate an analysis of the impact that their decisions will have on small businesses.
Unfortunately, the proposed rule published on June 24, 1996, escaped the attention of the Office of Advocacy. Had we noticed the improper certification and lack of data and analysis in the proposed rule, our office would have submitted comments in a timely fashion. In order to address and avoid future non-compliance with the RFA, the Office of Advocacy would like to go on record with the following comments and suggestions.
In order to comply with the RFA, an agency must either certify that a proposed rule will not have a significant economic impact on a substantial number of small entities; or, in the alternative, perform a final regulatory flexibility analysis (FRFA). To make a determination of whether to certify a rule, an agency must first determine the number of small entities affected. The FDA failed to indicate in either the proposed or the final rule the number of entities effected-small or large.
Based on 1993 data provided by the Bureau of the Census,(3) there are 989 firms in the business of fabricating rubber products. Although not all of the products included in the Census data represent medical devices, the data provides a good basis from which to extract information regarding the medical device industry. According to the data, 90.4% of all rubber fabricators have fewer than 500 employees and are considered small under SBA regulations, and they employ 46.5% of the industry. The attached chart, reproduced from the Census data provides further clarification. Given this data, it is clear that a huge portion of the industry is likely to be small-hence, a substantial number of small entities for certification purposes.
To comply with the certification requirements of the RFA, an agency must also make a preliminary assessment of the cost of the rule and whether the cost will disproportionately impact small entities. There is no mention in the proposed rule regarding the likely cost of the regulation. In the final rule, the agency mentions for the first time that the cost for the labeling change would range from $1,000 to $2,000 for each type of device relabeled. This new information comes only in response to an industry comment on the proposed rule that the change would cost as much as $15,000 per device. The agency neither provides data to rebut the industry's claim regarding cost, nor does it provide data to support its own claim regarding cost. Moreover, (assuming that the agency's estimates are correct), if a small entity manufacturers more than one type of device, even $2,000 per device could be quite prohibitive/significant.
Clearly, the agency has not complied with the Regulatory Flexibility Act. The agency should have concluded that a substantial number would be impacted. More information and analysis should have been provided to determine whether there was indeed a significant economic impact. Had the agency performed an initial regulatory flexibility analysis in the proposed rule, the final rule would be more credible in its certification.
These oversights on the part of the agency will not continue go unnoticed with the new judicial review provisions of the RFA in place. Improper certification of a rule is judicially reviewable. The FDA should, at a minimum, proceed cautiously in the future and provide adequate data and analysis for all its rules. To address the RFA issues in the instant final rule, the FDA should consider publishing a supplemental final regulatory flexibility analysis in the Federal Register. The Office of Advocacy is prepared to assist FDA in its RFA compliance efforts.
Please do not hesitate to contact me directly, or Ms. Shawne Carter McGibbon of my
staff, 202-205-6532 if you have any questions.
Sincerely,
Jere W. Glover
Chief Counsel for Advocacy
Shawne Carter McGibbon
Asst. Chief Counsel for Advocacy
Enclosure
Endnotes
1. Pub. L. No. 94-305, 90 Stat. 668 (codified as amended at 15 U.S.C. §§ 634a-g, 637).
2. Regulatory Flexibility Act, 5 U.S. C. § 601, as amended by the Small Business Regulatory Enforcement Fairness Act, Pub. L. No. 104-121, 110 Stat. 866 (1996).
3. The data is derived from the United States Enterprise and Employment Microdatabase (USEEM). In compiling this data, the Office of Advocacy examined the four digit Standard Industrial Classification (SIC) for Fabricated Rubber Products (#3069).